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    Karen Torkelson's Avatar
    Karen Torkelson Posts: 1, Reputation: 1
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    #1

    Jan 11, 2014, 10:32 AM
    Compute earnings per share
    A company has $600,000 earnings after taxes in 2009 with 300,00 shares of stock outstanding.

    I need to calculate earnings per share. In my text it uses dividends paid to common stockholder as part of the equation in a previous sample, but this assignment does not mention that. What am I missing?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Jan 12, 2014, 09:30 AM
    Earnings per share = (Net Income - Dividends paid to Preferred Stockholders) / Average Outstanding Common Shares

    So just take your earnings (net income) and divide it by your shares of common stock outstanding to get your answer.
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